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What is DICGC?
DICGC or Deposit Insurance and Credit Guarantee Corporation is a wholly-owned subsidiary of the Reserve Bank of India. This corporation was built to provide insurance of deposits and also, to solidify the credit facilities in India.
What is the maximum insurance amount provided by DICGC?
You are insured for up to Rs. 5 lakh (principal + interest) in a scheduled bank. It can be a commercial bank like SBI or HDFC Bank or it can be a small finance bank like Fincare or Suryodaya.
Case 1: You have Rs. 4.5 lakh in a bank and have earned an interest of Rs. 15,000 on it. The bank defaults. DICGC will pay you a total of Rs. 4.65 lakh.
Case 2: You have Rs. 5 lakh in a bank. You earned an interest of Rs. 25,000 on it. The bank defaults. DICGC will pay you a total of Rs. 5 lakh.
Case 3: You have Rs. 6 lakh in a bank. You earn an interest of Rs. 50,000 on it. The bank goes insolvent. DICGC will pay you a total of Rs. 5 lakh.
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What is covered in the DICGC insurance?
Money kept in the following is insured by DICGC:
- Savings account
- Fixed deposit account
- Savings account
- Recurring account
(This is not an exhaustive list)
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What is not covered in the deposit insurance by DICGC?
The following types of deposits are not insured by DICGC:
- Foreign Governments deposits
- Central/State Government deposits
- Inter-bank deposits
- Deposits of the State Land Development Banks with the State co-operative bank
- Any amount due on account of and deposit received outside India
- Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India
Are the company/corporate fixed deposits covered by DICGC?
No. DICGC deposit insurance is solely for banks. Non-banking financial companies (NBFCs) do not come under its umbrella.
Read More: Company/Corporate Fixed Deposits
What if I have different FDs in different banks?
All your deposits in a bank are covered for up to Rs. 5 lakh. Similarly, if you simultaneously invest in another bank, that amount will also be covered separately.
Let’s understand this with an example:
You have 3 FDs in 3 different banks, say, SBI (Rs. 1 lakh), Yes Bank (Rs. 4.5 lakh) and Kotak Mahindra Bank (Rs. 5 lakh). Now, Yes Bank and Kotak Mahindra Bank all go into liquidation (which is very unlikely). DICGC will pay you Rs. 4.5 lakh for your deposits in Yes Bank and Rs. 5 lakh for your deposits in Kotak Mahindra Bank.
What if there is more than one account in the same bank?
In case of more than one account in the same bank, whether it’s a combination of savings and fixed deposit account or the same type of accounts, the insurance coverage will be paid a total of Rs. 5 lakh and not separately per account. This coverage is provided per bank and not per account type.
In case of Joint Accounts
In case of a person holding two accounts in a bank, one individually and the other as a joint account, then DICGC shall be paying the compensation of Rs. 5 – 5 lakh separately to each depositor. Here, these accounts shall be held in different capacities and different rights.
Suppose, Mrs Arya has three accounts in, let’s say, DBS Bank, viz. a salary account (balance of Rs. 2.5 lakh), an FD account (Rs. 5 lakh) and a joint account, with her husband being the prime holder (balanced at Rs. 2.5 lakh). Now, unfortunately, the bank goes into liquidation. Mrs Arya’s salary account and FD account shall be treated as one, i.e. in the same capacity and right. Thus, DICGC shall be paying Rs. 5 lakh to Mrs Arya and Rs. 2.5 lakh to her husband, separately.
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Frequently Asked Questions (FAQs)
Does the interest accrued on a deposit also covered by the deposit insurance?
Yes. DICGC covers both the principal as well as the interest accrued. However, the total of the principal and interest cannot cross Rs. 5 lakh. If the principal itself is Rs. 5 lakh, the interest on it will not be covered.
Do I have to pay for the deposit insurance?
No. the cost of deposit insurance is borne solely by the insured bank.
When does DICGC come into the picture?
DICGC becomes liable to pay when an insured bank goes into liquidation. The bank provides the DICGC the claim list. Within 2 months of receipt of this claim list, the DICGC pays the total insurance amount to the liquidator. After this, it becomes the responsibility of the liquidator to proportionately disburse this amount to each insured depositor.
Can my bank withdraw from the DICGC coverage?
DICGC coverage is not a choice. It is compulsory. Therefore, no bank can withdraw from it.
How would I know if my bank deposit is insured by the DICGC?
Although it is established that all the commercial banks and cooperative banks are insured by the DICGC, in case of doubt, you must enquire about it with the bank’s official. Also, most of the times, in case of a fixed deposit, it will be clearly mentioned on your Fixed Deposit Receipt or FDR.
48 Comments
If there are two FDs (4 L each), one owned by Mrs. Swati and another by her Son Rama (14 yrs old).. As Rama is minor Mrs. Swati is the guardian for her son’s account too. Will they both get 4 L each or only 5L on both of them ? .
Hi RamaKrishna,
As per the guidelines mentioned by the DICGC, both the accounts are considered as held in different capacity and different right. Thus, there will be coverage of up to Rs 5 lakh, separately. (Both accounts must be in the same bank.)
Bajaj finace covered under DICGC ?
Non-Banking Financial Companies are not covered under the DICGC deposit insurance. Since Bajaj Finance is an NBFC, deposits made in it are not covered.
Firstly, this is great info on DICGC. Thanks for that. I have two queries.
1. In your example of joint account (at the end), Is there a error about Mr. Arya who also gets 5 lacks. As the joint account balance is 2.5 lacks, shouldn’t Mr. Arya get 2.5 lacks and Mrs. Arya based on other get 5 lacks ? Please confirm my understanding.
2. Looking at these details, is the recommendation to distribute funds across multiple DICGC insured banks along with single, joint accounts? If not, what is the recommendation if I have 20 lacks. how do I invest so that i’m insured return, when liquidity happens unfortunately.
Hi Mahesh,
Firstly, thanks for bringing the error to our notice. You are right. Mr Arya would get Rs 2.5 lakh while MrsArya shall receive Rs 5 lakh on liquidation.
Secondly, DICGC insurance covers all typ4es of accounts in a bank. If you have a joint account with someone in which you are the prime holder, it will be included in your insurance compensation.
Now, if you have Rs 20 lakh and you wish to invest the entire amount in FD, you can do so. Just make sure to be the prime/first holder if you’re making a joint account so that the compensation is released under your name, should the bank go into liquidation.
I am depositing in savings account of RBL ,Equitas & IDFC BANK whether my savings accounts in these banks insured
Yes, your money is insured in these banks by DICGC (up to Rs 5 lakh).
Hello, I have NRE fixed deposit as well NRE savings account with SBI and kotak mahindra bank, does it cover under DICGC. Thanks.
Hi John,
Amount in your savings account in both the banks is covered separately under the DICGC deposit insurance of up to Rs 5 lakh (per bank). The total deposits in one bank amounting to a maximum of Rs 5 lakh are covered.
My savings account in dicgc insure bank so how I insure my bank account
If you have deposits in a listed scheduled bank under the Reserve Bank of India, then you do not need to do anything at your end to get the DICGC cover. Your deposits are automatically covered.